Lendingkart: Temasek-owned Fullerton to take majority control in cash-strapped Lendingkart with Rs 252-crore commitment

MSME- focused digital lending platform Lendingkart has secured a commitment of Rs 252 crore from its existing investor Temasek-owned Fullerton Financial Holdings (FFH), the company said on Friday. The investment comes amid Lendingkart facing a severe cash crisis and a larger stress in the unsecured loan market.

The funding round will see Lendingkart’s valuation get slashed to around $100 million from $350 million in 2020, as reported first by ET on October 17.

The development after RBI’s action on Thursday against non-banking finance companies and microfinance firms like Navi and DMI Finance being banned from sanctioning loans.

Details of investment

In a statement, the Ahmedabad-based Lendingkart said the capital infusion from FFH will enable it to deepen its reach in underserved markets and enhance its technology to cater to the financial needs of small businesses.

“Our investment in Lendingkart is a testament to our continued belief in the MSME opportunity in India and that well-governed, scalable franchises can bring significant value to small businesses,” said Hong Ping Yeo, chief executive officer, FFH.

Through the investment, FFH will be acquiring a controlling stake in the entity after mandatory regulatory approvals, the company said in a statement on Friday. As per Tracxn, FFH already holds a 38% stake in the cash-strapped firm.

The round will see Lendingkart undertake a massive valuation cut to around $100 million from the $350 million it had achieved in the last institutional funding in 2020, said people in the know.

Lendingkart did not comment on these figures.

Through the investment, FFH will be acquiring a controlling stake in the entity, the company said in a statement on Friday. As per Tracxn, FFH already holds a 38% stake in the cash-strapped firm.

The round will see Lendingkart undertake a massive valuation cut to around $100 million from the $350 million it had achieved in the last institutional funding in 2020, said people in the know.

Lendingkart did not comment on these figures.

The company had been in the market to secure a $30- $50 million equity funding since last year. Since the cash infusion did not materialise, it picked up $10 million in venture debt from BlueOrchard.

While building its business on a co-lending model, Lendingkart managed to stage a turnaround after 2022 with strong profits in fiscal 2023. However, it reported a net profit of only Rs 3 crore at a consolidated level in financial year 2024, owing to asset quality issues and increase in the cost of capital.